Employment and Skills

Changes in employment and unemployment: the best and the worst

Thursday May 18, 2017Mark Cox

At about this stage in the electoral cycle attention tends to focus on how well or badly the incumbent government has performed in terms of employment and unemployment. And, naturally, it is relatively easy to highlight respects in which the government has done a good or poor job, depending on one’s political leanings.

The bare statistics are that, overall between the start of 2009 and the start of 2017, the total number of people in employment grew from 2,157,000 to 2,547,000: an increase of 18.1%. During the same period, the total number of people who were unemployed grew from 122,400 to 139,100: an increase of 13.6%. However, the unemployment rate decreased slightly: from 5.4% to 5.2%.

In this article, we sidestep judgements as far as possible by simply showing which groups in the population and parts of the economy have fared best and worst in terms of changes in the numbers employed and unemployed. The changes are shown in percentages. The time period over which changes are measured is from the first quarter of 2009 (the first full quarter after the Fifth National Government of New Zealand took office). All of the data are taken from the Household Labour Force Survey.

Table 1 indicates that females have fared slightly worse than males in terms of employment, but significantly worse in terms of unemployment. This is partly explained by the fact that the female labour force participation rate has grown by more than male labour force participation rate. It might also be explained by the fact that employment in Clerical and admin occupations, where females tend to dominate, is the occupational group where employment has grown slowest (see Table 7).

Table 2 shows that the number of people aged 65 plus has virtually doubled in eight years. The underlying data show that the actual number of older people in employment increased from 81,300 (equivalent to 3.8% of total employment) at the start of 2009, to 161,900 (6.4% of total employment) at the start of 2017.

The table also indicates that people at the opposite end of the age range fared worse in terms of employment. People in the middle age ranges fared best in terms of unemployment (actually enjoying a decrease in numbers), while those aged 25-29 fared worse.

Table 3 shows that people of Asian origin fared best in terms of employment growth and, at the same time, worst in terms of unemployment growth. Conversely, people of European origin fared worst in terms of employment growth and best in terms of unemployment growth. More than anything else, these findings reflect the rapidly changing composition of the New Zealand population.

In a world where possession of a tertiary education qualification is seen as being increasingly important, it is slightly surprising that Table 4 shows that employment growth has been greatest amongst people whose highest educational qualification is at secondary level. Equally curious is the fact that this group of people is the one whose members have fared worst in terms of unemployment.

In light of the world view above, the finding that people whose highest qualification is at degree level or equivalent have fared best in terms of unemployment is less surprising.

Table 5 shows that the Auckland region has fared best in terms of both employment and unemployment since the start of 2009. Employment growth in Southland has been relatively slow, but it has still averaged almost one percent per annum. Unemployment in Taranaki has increased very dramatically, but this has been from a very low base. At the start of 2009, the region’s unemployment rate was only 1.5% and it had increased to 6.3% at the start of this year.

Both of the industries featured in Table 6 are small, in terms of the number of people they employ. Electricity, gas, water and waste service employ an estimated 22,600 people (or 0.9% of all people in employment), while Mining employs just 4,300 people (or 0.2% of the total).

There are almost half a million employed people in New Zealand who are classified as Managers and, as Table 7 shows, their number has increased by more than one third since the start of 2009. The table does not show Professionals, but this is the largest occupational group, employing almost 600,000 people; up by more than a quarter since 2009.

At the other end of the scale employment in the Clerical and admin occupational group has almost stagnated. This is largely due to the computerisation of many relatively routine office-based roles.

Readers will be able to decide for themselves whether the labour market performance outlined here has been praiseworthy or otherwise, but it is clear that whichever party leads the government after the September general election will be faced with the challenge of addressing stubborn levels of unemployment, as well as managing changes in the structure, composition and geographical distribution of employment.